Why You Should Write A Business Plan

Often, in our rush to get ahead and do things, we forget to plan.

Do you have a business plan? Do you have a plan, but haven't updated it in a while?

A business plan need not be complicated. A few bullet points on the back of an envelope can constitute a business plan. A business plan is simply a description of what you intend to do, and how you intend to do it. Once you write down a plan, your business becomes a lot easier to visualize, and you have a clear, simple means to measure your performance.

The Importance Of Writing Things Down

We all make lists. Why? Probably because our memories aren't that good. A list also helps to focus attention. There's something about the very act of writing things down that makes a nebulous action concrete.

The same theory applies to business plans. Write down what you plan to do, how you plan to do it, and put some milestones around it.
i.e. I'm going to achieve target x by December. It's also a good idea to have a rough idea of how much that milestone is going to cost you to achieve, and the revenue you expect from it.

For Whom Are You Writing The Business Plan?

Is you aim to attract VC? Get a loan from the bank? For internal staff to be clear about direction? For your own use? Depending on your answer, you business plan will have different requirements in terms of the information provided.

All business plans have the following components:

  • Executive summary
  • Business description
  • Market strategy
  • Competitive analysis
  • Design and development plan
  • Operations and management plan
  • Financial factors

Business plans aren't just for start-ups, either.

As a business transitions through different stages as it grows, the plan needs to change. You might want to figure out the best way to invest or fund expansion. A new financial period may be beginning. What are your plans for the next financial year? Do you need to refinance? Are you taking on more employees? Does your old plan fit your new reality?

The Three Types Of Business Plans

Complete business plans often contain all these elements. However, if you haven't got the time to construct a detailed plan, you can break it down based on intended audience.

Short Plan

Could be as short as one page.

Answer the following questions.

  • What is your concept?
  • How much money will you need to execute your plan?
  • How do you intend to plan to market your business to customers/clients?
  • What will your cash flow look like, and over what time frame?

Simple questions, right. Many business ideas can be adopted or discounted on those four questions alone, saving you a lot of time, money, and more importantly - opportunity cost.

However, these plans aren't detailed enough if you're seeking investment.

Presentation Plan

The essential difference between a working plan and a presentation plan is style and appearance. It's tone is serious, and it usually comes complete with charts, forecasts and diagrams designed to convey to people that you've put a lot of consideration into your venture. Presentation plans should be free of industry jargon. Investors like to see a lot of due diligence, especially when it comes to competitive threats.

Working Plan

A working plan is a plan used to operate your business. Like a short plan, it is less formal in terms of style. It is used internally to ensure everyone has enough information to be on the same page.

The SEO Business Plan

We've drawn up a complete business plan that provides an out-of-the-box SEO model for those thinking of starting up their own SEO service. This includes charts and detailed financial breakdowns, as well as SEO industry information and a ready-to-use strategy for 2009-2013.

You can use this plan as it is, or use it as a template to adapt it for your own needs.

In the coming weeks, we'll also provide detailed business plans for an SEO publisher model and SEO product seller.

Published: July 3, 2009 by A Reader in marketing


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